United States District Court, D. Maryland
MEMORANDUM OPINION AND ORDER
Xinis United States District Judge
before the Court in this qui tam action is the
Motion to Dismiss the Amended Complaint filed by Defendants
CASA de Maryland, CASA in Action, Gustavo Torres, and
Virginia Kase (collectively, “Defendants” or
“CASA”). ECF No. 27. Also pending is the Motion
for Reconsideration filed by Plaintiff-Relator Amalia Potter.
ECF No. 24. The matters are fully briefed, and no hearing is
necessary. See D. Md. Loc. R. 105.6. Upon
consideration of the parties' arguments, the Court GRANTS
Defendants' motion and DENIES Plaintiff's motion.
case was the subject of the Court's prior Memorandum
Opinion and Order, so the Court will not repeat the matters
previously discussed in detail. See ECF Nos. 22, 23.
maintains that her former employer, CASA de Maryland, Inc.
and its affiliate, CASA in Action, Inc., violated the False
Claims Act (“FCA”) by certifying that CASA had
complied with all “applicable” laws and
regulations in connection with federal grant monies it
received, even though CASA had not fully and properly
completed I-9 employment verification forms for all of its
employees. Potter specifically alleges that CASA made false
claims to the Government during an audit triggered by
CASA's receipt of Government funds (the “A-133
Audit”), and in grant-related documents called Program
Participation Assurances (“PPAs”) and Financial
Status Reports (“FSPs”), in which CASA certified
that it had complied with “applicable” laws,
regulations, and grant provisions governing the programs
under which CASA received Government funding. When Potter
tried to address the deficient I-9 forms with CASA, she faced
resistance and then was fired.
prior Memorandum Opinion, the Court dismissed Potter's
substantive FCA and FCA conspiracy claims because Potter
failed to aver facts to support a plausible inference that
CASA falsely represented or omitted information to the
Government relating to incomplete or deficient I-9 forms, or
that such false representations or omissions would have been
material to the Government's decision whether to grant
funding to CASA. ECF No. 22 at 6-13. The Court also dismissed
Potter's FCA retaliation claim because at best, the
Complaint showed that CASA knew about Potter's concerns
regarding I-9 compliance, but the Complaint did not include
sufficient facts to support the objective reasonableness of
Potter's view that CASA was violating the FCA, or that
CASA was on notice of FCA-protected activity. ECF No. 22 at
Court granted Potter leave to amend her Complaint to cure the
pleading deficiencies identified in her FCA claims. The Court
particularly noted that the Complaint was bereft of any facts
showing that CASA made any materially false statements or
material omissions regarding I-9 employee verifications in
the A-133 Audit, in PPAs, or in FSPs, and directed Potter to
amend the Complaint to add such facts, if possible. Potter
was also directed to provide additional facts related to her
allegedly protected conduct sufficient to make out a
retaliation claim. The Court dismissed Potter's state-law
wrongful termination claim with prejudice.
has now amended her Complaint, but adds no facts regarding
representations or omissions made to the Government during
the A-133 Audit, in PPAs, or in FSPs, related to the
completion of I-9 forms. Nor has Potter included any facts to
show how the claimed I-9 deficiencies were material to the
Government's decision to pay CASA federal grant monies.
Rather, Potter's new factual allegations concern the
circumstances under which she discovered CASA's I-9
noncompliance and how she confirmed her suspicion that
CASA's methods for addressing deficient I-9 forms
contravened other legal requirements. Potter also provides
further detail about her communications with CASA regarding
the proper way to correct employees' I-9 forms.
See ECF No. 25 ¶¶ 61, 62, 66, 68, 69, 70,
73, 74, 78.
move to dismiss the Amended Complaint, arguing that
Potter's amendments did not cure the deficiencies
identified by the Court. See generally ECF No. 27.
In response, Potter contends that because an A-133 Audit
requires review of employee I-9 forms and the I-9 forms were
not properly completed, any CASA certifications regarding
compliance with the A-133 Audit requirements must have been
false. ECF No. 28-1 at 7. Potter contends that the I-9 forms
necessarily were material to the Government's decision to
grant funding because the A-133 Audit includes a review of
I-9s. ECF No. 28-1 at 8. Potter also argues that her Amended
Complaint sufficiently supports her contention that she was
engaged in FCA-protected conduct and terminated because of
that conduct. ECF No. 28-1 at 8-11. Separately, Potter moves
the Court to alter or amend the dismissal with prejudice of
her wrongful discharge claim (Count IV of her initial
Complaint), arguing that she was indeed terminated for her
refusal to amend the I-9s in a manner which would constitute
a crime. See ECF No. 24.
Court discusses each motion in turn. For the reasons that
follow, the Court will grant Defendants' motion to
dismiss, and deny Potter's motion for reconsideration.
Motion to Dismiss
reviewing a motion to dismiss pursuant to Federal Rule of
Civil Procedure 12(b)(6), the Court must determine whether
the complaint includes facts sufficient to state a claim to
relief that is plausible on its face. Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007); Ashcroft v.
Iqbal, 556 U.S. 662, 678-79 (2009). A plaintiff must
plead facts to support each element of the claim to satisfy
the standard. See McCleary-Evans v. Maryland Dep't of
Transp., State Highway Admin., 780 F.3d 582, 585 (4th
Cir. 2015). In so assessing, the Court takes as true all
well-pleaded factual allegations and makes all reasonable
inferences in the plaintiff's favor. Philips v. Pitt
Cty. Mem. Hosp., 572 F.3d 176, 180 (4th Cir. 2009). The
Court does not credit conclusory statements or legal
conclusions, even when couched as allegations of fact.
See Iqbal, 556 U.S. 678-79; Giarratano v.
Johnson, 521 F.3d 298, 302 (4th Cir. 2008). Actions
brought under the FCA must “state with particularity
the circumstances constituting fraud or mistake.”
Fed.R.Civ.P. 9(b); see U.S. ex rel. Nathan v. Takeda
Pharm. N. Am., Inc., 707 F.3d 451, 456 (4th Cir. 2013).
deciding a motion brought under Rule 12(b)(6), the Court
generally may not consider extrinsic evidence. However, the
Court may consider any documents attached to a motion to
dismiss if they are “integral to and explicitly relied
on in the complaint, ” and authenticity is not
challenged. Am. Chiropractic Ass'n v. Trigon
Healthcare, Inc., 367 F.3d 212, 234 (4th Cir. 2004);
see also Philips, 572 F.3d at 180; Walker v.
S.W.I.F.T. SCRL, 517 F.Supp.2d 801, 806 (E.D. Va. 2007)
(“[W]here a complaint in a fraud action references a
document containing the alleged material misrepresentations,
the referenced document may be considered part of the
complaint.”). This rule seeks to prevent a
“situation in which a plaintiff is able to maintain a
claim of fraud by extracting an isolated statement from a
document . . . even though if the statement were examined in
the full context of the document, it would be clear that the
statement was not fraudulent.” Am. Chiropractic
Ass'n, 367 F.3d at 234 (internal marks and citation
Substantive FCA Violation (Count I) and Conspiracy to ...